Reliance Capital Limited, a part of Anil Ambani-led Reliance Group, on Tuesday said it has exercised the "green-shoe" option to sell over 8 per cent of its stake in Reliance Nippon Life Asset Management Limited (RNAM) for Rs 1,100 crore. A green-shoe option is an over-allotment option.
"Reliance Capital has exercised the "Green-Shoe" option and will sell over 8 percent of its shareholding in RNAM through this OFS aggregating approximately Rs 1,100 crore," the Anil Ambani-led company said in a filing to the Bombay Stock Exchange.
On May 23, Reliance Capital had announced the offer for sale (OFS) to offload its shareholding in RNAM in order to comply with the mandatory requirement of achieving minimum public shareholding of 25 per cent by reducing the promoter stake.
The OFS has received an excellent response from investors and the company is expected to raise Rs 6,000 crore from the sale, Reliance Capital said, adding that it will use fund proceeds to reduce company's outstanding debt. JM Financial and CLSA acted as Selling Brokers for the offer for sale.
Reliance Capital expects to reduce its debt by at least Rs 12,000 crore, or 70 per cent, in the current financial year through stake sale and asset monetisation deals "presently underway", it added.
On Monday, Reliance Capital filed requisite disclosures with the Stock Exchanges intimating release of pledge over 8.66 per cent shareholding in RNAM, which had been created in favour of JM Financial Credit Solutions Limited and JM Financial Products Limited, in April 2019.
In a separate development, Reliance Capital Group announced that it has agreed to divest their entire equity stake in Reliance Broadcast Network Limited (RBNL), which operates BIG FM radio channels, to Music Broadcast Limited (MBL). The transaction will reduce Reliance Capital's outstanding debt by an estimated Rs 1,200 crore, it said.
Reliance Broadcast Network is part of the Reliance Anil Dhirubhai Ambani Group which operates Big FM Radio stations and BIG Magic television channel in India.
Jagran Prakashan-owned MBL will initially acquire a 24 per cent equity stake of RBNL by way of a preferential allotment for a total consideration of Rs 202 crore. MBL will acquire the remaining equity stake in RBNL at a total enterprise value of Rs 1,050 crore, subjected to the receipt of all regulatory approvals.
"In addition, Reliance Capital will receive an estimated Rs 150 crore from the disposal of other assets of RBNL which do not form part of the transaction with MBL, in accordance with the regulations," it added.
Boosted by the development, shares of Reliance Capital surged 2.13 per cent to close at Rs 136.55 apiece on the Bombay Stock Exchange. The stock surged 7.70 per cent to touch an intra-day high of Rs 144.
Edited by Chitranjan Kumar